President Donald Trump declared a national emergency Wednesday over Chinese-made equipment in the core of America’s AI data centers. The numbers behind his declaration are stunning.
In a move that threatens to rip apart the global supply chain for data center hardware, President Donald Trump has declared a national emergency in order to block the importation of Chinese equipment buried deep inside America’s AI infrastructure. The new executive order signed by Trump last week gives the Department of Energy the authority to block or to impose conditions on transactions involving foreign-made equipment in the bulk-power system as well as in data center construction.
China’s share of other subcategories of transformers and switchgear, used to power the facility, ranges around 30 percent, according to Yury Dvorkin, associate professor at Johns Hopkins University. For batteries specifically imported for data centers, the Chinese share is over 40 percent. And then there are the raw materials that Chinese suppliers control at the upstream stages of production — copper, electrical steel, and battery cathode materials, to name a few.
But it’s not just the substation transformers that the AI infrastructure buildout is increasingly dependent on Chinese imports for, according to Ben Boucher, senior supply chain analyst at Wood Mackenzie. He highlights a few key areas of supply chain exposure that the AI buildout of data centers is dependent on. “And if you can’t bring those in, you can’t build out the AI infrastructure of the data centers,” he said.
China has a near two-thirds share of global optical transceiver units in revenue terms, led by the market of two major domestic firms, Zhongji Innolight and Eoptolink, which together account for over 50 percent of data center optical transceiver markets — other Chinese companies taking up the remainder.
Hellbound and Down 